Energy Practice

Oil & Gas

Nigeria’s oil and gas industry has witnessed significant changes over the last decade. The passage of the Nigerian Oil and Gas Industry Development Content Act (“Local Content Act”) as well as the government’s overt indigenous policy and onshore divestments by oil and gas majors has led to the emergence of significant local players in the upstream oil and gas industry. The Local Content Act has also fostered the growth of a budding indigenous service industry for the upstream sector. These advances have led to the formation of new partnerships between (mostly new) international players and the indigenous companies.

Our Energy Practice Team has been at the centre of these developments. We are assisting international players in their partnerships with local companies; facilitating major oil and gas acquisitions; and helping existing and new players understand their responsibilities in the emerging regulatory framework.

With the more recent passage of the Petroleum Industry Act (“PIA”), our lawyers led the debate around the development of the legislation, having advised various key industry stakeholders, including members of the national assembly and private sector operators on significant aspects of the law. Since its passage, we have been supporting both public and private entities in the interpretation and implementation of the provisions of the PIA poised to promote petroleum products price deregulation, downstream gas utilisation and the establishment of private refineries which are expected to drive the growth of the downstream petroleum sector in the immediate future.

The Energy Practice Team still runs the only website (petroleumindustrybill.com) which was dedicated to providing up-to-date news, information and analysis of the Bill and now providing updates around the implementation of the PIA.

Notable Transactions

• The firm offered legal advice to an indigenous Exploration and Production company in its US$ 63 Million acquisition of an indirect interest in an Oil Mining Lease. Our role included advising on acquisition arrangements and structuring as well as advising on the lending structures and agreements.
• The Energy Practice Team provided legal advice to a major global commodities trading company on oil spill liabilities in Nigeria. The firm also coordinated the advice of other law offices in over 10 jurisdictions in North, West and Central Africa as it compiled the different oil spill liabilities for each of those territories.
• The firm is currently offering legal advice to a Nigerian oil and gas company in its acquisition of a Farm-in interest in an Oil Mining Lease worth US$ 127, 500, 000. Our range of services includes transaction structuring, preparation and negotiation of the acquisition agreements.
• The firm continues to advice companies across the Oil and Gas value chain on the impact of several laws and regulations (including the Nigerian Oil and Gas Content Development Act and the Petroleum Industry Bill) on its operations as well as on lobbying strategies with the government.
• We have acted as local counsel to a Canadian Exploration and Production company in a reverse takeover transaction worth over US$ 150 Million involving an indigenous counterpart.
• Our team has acted as Lender’s transaction counsel in a US$550 Million Syndicated Amortized Oil Export Backed Term Loan Facility required by a Petroleum Exploration and Production Company for developing its interests in three Oil Mining Leases.

Electricity

With the various ongoing sector reforms being championed by the Presidential Task Force on Power: Generation, Distribution, Transmission, Fuel-to-Power, NIPP Projects, establishment of the Nigerian Bulk Electricity Trader and the recent privatisation of electricity distribution and generation companies, Nigeria’s electricity industry has been provided a platform for much needed private sector-led growth. In the near term, we expect to see a significant demand for local and foreign financing for capital projects required to upgrade and update the aged infrastructure of the newly privatised companies as well as that of the Transmission Company of Nigeria. Additionally, the new electricity distribution companies will require additional power from embedded generation plants to satisfy the demands of their customers. Odujinrin & Adefulu’s Energy Practice Team has significant electricity regulatory, transactional and financing experience which places us in an excellent position to provide the support required to further the advancement of this nascent industry.

Notable Transactions

• The only local firm member of the team that drafted Nigeria’s Electric Power Sector Reform Act. Advised NERC as well as various private companies on regulatory aspects of the Nigerian electricity industry.
• In collaboration with the Corporate, Finance & Capital Markets Team acting as Lender’s Legal Adviser in financing the acquisition of electricity generation and distribution companies.
• In the ongoing Nigerian Electricity Privatization exercise, the team successfully provided legal representation to the preferred bidder of one of Nigeria’s electricity distribution companies in a transaction worth US$ 82 Million.
• The team advised an Independent Power Plant (IPP) Operator on its embedded power generation arrangements, a concept that is novel in the Nigerian electricity supply industry.
• Acting as Transaction Advisor in the concession of Small and Medium Hydro Power Plants by the Federal Ministry of Power, the team is engaged in the review of the relevant legal & regulatory framework, developing a draft outline of a Power Purchase Agreement to be entered into between the investor and an off-taker and developing a draft outline of a Concession Agreement for a Hydropower Project.
• In collaboration with the firm’s Real Estate and Mining Department, the team provided high-level advice to a mining Company in its 75MW captive power plant.
• In collaboration with the Corporate Finance Department acted as Lender’s Legal Adviser to the mandated lead arranger in respect of a proposed US$110 Million Facility for financing the acquisition of a 60% shareholding interest in one of PHCN’s successor Distribution Companies.

Awards & Recognitions

Chambers and Partners

The Firm and the Head of its Energy Practice Team, Dr. Adeoye Adefulu, are both ranked in the Chambers and Partners Energy and Natural Resources Profile on Nigeria.

“Top-level clients… seek this firm’s advice on structural and regulatory issues and the problematic Petroleum Industry Bill. Overall, the team earns good feedback for its knowledge of the energy sector and its proactive approach to keeping clients updated.”

The Legal 500

The team and Dr. Adefulu are also noted by the Legal 500 as leaders in the Nigerian Oil and Gas sector.

“Odujinrin & Adefulu’s services cover the entire chain of the oil and gas industry, from exploration and production through to distribution and marketing. The practice has also acted in relation to the development of Nigeria’s power industry, and has assisted with regulatory issues and power purchase agreements.”